Optimal policy for a two-facility inventory problem with storage constraints and two freight modes
This paper considers a two-facility supply chain for a single product in which facility 1 orders the product from facility 2 and facility 2 orders the product from a supplier in each period. The orders placed by each facility are delivered in two possible nonnegative integer numbers of periods. The difference between them is one period. Random demands in each period arise only at facility 1. There are physical storage constraints at both facilities in each period. The objective of the supply chain is to find an ordering policy that minimizes the expected cost over a finite horizon and the discounted stationary expected cost over an infinite horizon. We characterize the structure of the minimum expected cost and the optimal ordering policy for both the finite and the discounted stationary infinite horizon problems.
Year of publication: |
2009
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Authors: | Xu, Ningxiong |
Published in: |
European Journal of Operational Research. - Elsevier, ISSN 0377-2217. - Vol. 194.2009, 1, p. 78-84
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Publisher: |
Elsevier |
Keywords: | Inventory Additive function Stochastic dynamic program Finite and discounted stationary infinite horizon Two-facility supply chain Two delivery lead times Storage constraints |
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